What Are The Benefits Of Education Loan On Property For Higher Studies?by Alisha Antil Financial Blogger
The cost of higher education is set to rise year-on-year. For instance, the expenses to enroll in IIT courses increased from Rs. 18.5 Lakh in 2017 to Rs. 19.5 Lakh in 2018. Additionally, the cost of education abroad may reach to a Crore and even more. To finance such significant expenses, lenders offer secured advances such as education loans against property. However, you must understand what is education loan against the property before you apply.
What Is Education Loan On Property?
A loan against property for education is a type of secured advance that you avail against mortgaging the property. The loan amount does not have any end-user restrictions for which you can use the amount to manage expenses required for tuition, accommodation, travel, and other expenditures such as medical cost, financial crunch, etc.
Substantial loan amount
One of the most vital things that you should know about loan against property for education is to avail only for the loan amount you require. Considerable loan amounts of up to Rs. 3.5 Crore are offered as loans against properties.
You may need to meet several expenses while studying abroad including the varied cost of living as well as accommodation if not provided by the educational institution in question. Note that an education loan will only cover expenses mentioned by an educational institution. So, if the institute of your choice does not provide accommodation, you may not be covered such expenses with an education loan.
The tax benefits you can avail on your LAP are -
Under this section of the Income Tax Act, you can claim tax benefits considering the amounts are used to meet business requirements.
The tax benefits that you can claim under this section depend on the end-usage of the amount. If you use the amount to fund the purchase of another property, you can claim tax deductions against the amount payable towards the interest rate of your loan against property for education.
Flexible Loan Tenor
You can enjoy a prolonged repayment tenor while you fund the expenses of studying in one of the top colleges in the world. You can repay the amount within a period ranging between 2 years and 20 years.
However, before you decide on your tenor, consider evaluating your financial stability and repayment capability to ensure that your education in any of the top universities in the USA is not hampered.
You can choose to pre-pay or part-pay your credit in case you have a salary hike or a stable income source. Against such payments, you are required to pay a minimal fee.
Also, opting for part-payments will help to lower the outstanding principal amount, decrease the interest rate and also make your EMIs affordable to reduce the burden on your pocket. You can prepay your loan against property by accessing your online account on the official portal of your lender and opting for online payment.
You can wish to opt for balance transfer facilities that help you reduce the interest amount. With the balance transfer facility, you can carry forward your existing due from your current lender to a new financial company offering advances at a lower interest rate.
NBFCs have introduced pre-approved offers that ease the hassle of the application process and save time to do so. These offers are available on various financial products, including secured and unsecured loans such as home loans, personal loans, business loans, etc. To check your pre-approved offer, share only some basic details like your name and phone number.
To further understand what is an education loan on a property and its benefits you should also be aware of the documentation process. You are required to submit documents like -
Identity proof – Aadhaar card, PAN card, passport, driving license, etc.
Address proof – voter ID, ration card, electricity bills, telephone bills, etc.
Additionally, you are also required to submit your income proof documents depending on the source of your income. Salaried applicants are required to submit salary slips, whereas self-employed individuals are required to provide their profit and loss balance sheets along with account statements and income tax returns.
Now that you have understood what is education loan on a property, you can apply for the same on the official website of your lender. You will have to fill out an application form with your personal and financial details and provide the above-mentioned documents.
Various lenders also offer you doorstep services where a representative will collect the document from your residence. After your documents are verified the loan amount will be credited to your account directly.
Created on Nov 27th 2019 00:33. Viewed 128 times.